NEW YORK, (Reuters) - Steward Health, which operates 31 hospitals in eight U.S. states, filed for Chapter 11 bankruptcy in Texas on Monday, aiming to secure a new loan from its landlord Medical Properties Trust.
Steward, the largest private physician-owned for-profit healthcare network in the U.S., said it would continue serving patients as normal during its bankruptcy.
Steward will seek up to $300 million in financing from Medical Properties Trust, after failing to quickly close a sale of its physician group Stewardship Health. The company is asking for $75 million to start its bankruptcy case, with up to $225 million at a later date.
"With the delay in closing of the Stewardship Health transaction, Steward was forced to seek alternative methods of bridging its operations," Steward CEO Ralph de la Torre said Monday.
"With the additional financing in this process, we are confident that we will keep hospitals open, supplied, and operating so that our care of our patients and our employees is maintained," de la Torre added in a statement.
Steward employees 4,500 primary and specialty care physicians with 3,600 staffed beds and nearly 30,000 employees. Steward Health Care provides care to more than two million patients annually.
The company recently closed a hospital in Massachusetts. State officials and politicians have said it did not disclose the extent of its financial troubles until they were deep enough to imperil medical care in eight remaining hospitals it operates in the commonwealth.
Massachusetts Governor Maura Healey said in a Monday press conference that her team has been working to minimize the bankruptcy's impact on patients, and she would support an orderly bankruptcy sale away from Steward's "failed management team."
"Ultimately, this is a step toward our goal of getting Steward out of Massachusetts," Healey said.
Steward's court-supervised bankruptcy will provide transparency into the company's finances, so that its "failed management team" will "no longer be able to lie" about its debts, the governor added.
Steward filed for bankruptcy with between $1 billion and $10 billion in liabilities, according to its Chapter 11 petition filed in Houston, Texas bankruptcy court.
Reporting by Dietrich Knauth in New York; Editing by Alexander Smith and Bill Berkrot
Source: Reuters